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Analysis

Toncoin soars 30% – But THIS indicator presents a warning sign to investors

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The positive MVRV and Toncoin downtrend was a pattern that happened last year- with bearish results.
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Toncoin rallies 30% in a week, but the bullish sentiment might face challenges soon
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  • Toncoin remained in a downtrend despite large gains.
  • A pattern from mid-August is recurring and will give TON bulls pause.

Toncoin [TON] gained 32.84% in a week, from the low at $4.43 on Friday, the 6th of September, to $5.885 the next week. Despite these strong gains, the market structure on the daily timeframe was bearish.

Heading into the next week of trading, Toncoin is one of the large-cap assets with high bullish expectations due to the previous week’s performance. Will the buyers be able to sustain the rally?

Rally, or a liquidity hunt before a continued downtrend?

Toncoin 1-day Chart

Source: TON/USDT on TradingView

The past week’s gains were considerable, but the trading volume did not jump significantly higher. By contrast, the move downward on the 24th of August from $6.8 to $5.1 two days later saw a much higher volume.

The trading volume of the past few days was comparable to mid-June levels, when TON was trading at the $7.1-$7.6 region but lacked a strong trend. Hence, a sustained push upward would likely require greater volume.

The CMF was at +0.05, the threshold of significant capital inflows. The daily RSI stepped above neutral 50 to signal bullish momentum. These factors gave bulls hope that a market structure break could occur soon.

Is this bounce a profit-taking opportunity?

Toncoin Santiment

Source: Santiment

In mid-August, the 30-day MVRV briefly climbed into positive territory. It should be noted that, from a price action perspective, TON was in a downtrend at that time. After a few days, the price began to fall on the 24th of August, dragging the MVRV down with it.

Read Toncoin’s [TON] Price Prediction 2024-25

The past few days’ gains saw the MVRV venture into positive territory again, but the downtrend of TON remains in play. The downtrend may continue like it did last month.

On the other hand, the mean coin age has trended higher recently, a sign of accumulation and bullishness. Traders should remain cautious until the $6.1 resistance is breached.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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